It's Not Until Companies Leave... That We Realize Their True Power The above collage depicts the devastation the community of Wilmington, Ohio faced when their largest employer, DHL, left the city after 5 years. The city has been visited by President Obama, President Bush, Presidential Candidate John McCain, seen on CBS's 60 Minutes television show, and helped by celebrities Nick Lachey, Rachael Ray, and Jay Leno. The focus of this sustainability problem deals with companies and businesses leaving cities with no options or help because of the communities' extreme dependance on that one large employer. Introduction to Problem
Every city, no matter what size, has businesses and companies that are located within it. Many large businesses have locations all across the country. In today’s difficult economy, people and companies are facing financial issues, cutting costs, and having to make difficult decisions on priorities to stay stable. When we talk about the economy, often times people and businesses are spoke of as separate entities, however this is not the case. If companies are having trouble, so are the people who work there, families of workers, the communities that the companies are located in, and other companies, schools, and services located within these cities.
Reasons for Companies' Sustainability Issues
- Filed for bankruptcy and couldn’t find a buyer
- Decline in sales
- Leaving and entering a new market
- Moving manufacturing or part of company’s work overseas- Industrial Ineffienciency and Downsizing
This article brings about another point many people probably don't think about. "The large reductions of employment in major U.S. companies during the past decade raise the question of how this apparent "fat" accumulates in corporate hierarchies and what shocks promote its removal." [12 Krepps 1997]
We watched film on how companies wanted to be considered as a “person”, however, they are so much larger and powerful than a person. Many times the power of a company is not realized until they actually leave the city and only then their effect on the community can be witnessed.
Issues within this Problem Every year companies and brands go out of business. Recently with the economic depression, many of those that have been long standing are disappearing. Do we ever stop to think, what has happened to towns where these businesses existed? Are the employees able to find new jobs?
Below are a wide range of examples within the last 2 years: [3 AOL 2009]
- Abercrombie and Fitch’s Ruehl brand will close by end of the year
- 60 Banks failed in 2009 – Washington Mutual Bank (WaMu) located in the hear of Seattle, Washington
- Circuit City closing and 30 thousand employees will be out of work
- Car Brands Disappearing
Saturn and Hummer gone
GM had 21k job cuts, closing 14 plants in 8 states, and ended franchise agreements with 2300 dealerships
Pontiac just announced the discontinuation of the brand
- Linens ‘N Things exists only as an online-business now
Harder Hit Areas with More Focused Employee Base
- Kennedy Space Center Shuttle Program Ending
More than 1,200 NASA workers were laid off
- ArcelorMittal the world’s largest steel producer closing part of business reducing number of employees from seven thousand to a few dozen
- Sysco located in Norton, Mass is proposing to leave and move to a new city.
- Callaway Golf has began a phased layoff of 1,200 employees moving manufacturing to Mexico
- Electrolux closed 2 Iowa plants and sending work to Mexico leaving 850 thousand out of work
Consequences of This problem Many of the NASA workers have been working there for many years
One employee “John Bundy, 50, started his career [at age 19] as a technician on the shuttle thermal protection system and then worked his way up to manager for Kennedy Space Center's orbital processing facility.” [4 CNN 2010]
“Now, he's updating his résumé and taking welding classes at Brevard Community College in hopes of finding another job.”[4 CNN 2010]
DHL Acquiring Airborne Express
Wilmington Air Park in Wilmington, Ohio, is the largest privately owned airport with a Category 3 radar in the United States at approximately 2,200-acres. Clinton County's largest employer is the Air Park.” [8 CBS 2009]
"We just thought that it was the worst business plan ever," says the Mayor of Wilmington, David Raizk. [8 CBS 2009]
"They did this multimillion-dollar investment in Wilmington, but we are not sure if they understood how the express product works here. They tried to impose their plan, but the two business cultures were really different. It is a shame, because if you own your airport, you can control your costs and how you ship your freight. They were losing enormous amounts of money and clients." [1 Independent 2010]
“According to the Economic Task Force for the DHL hub convened by Lt. Gov. Lee Fisher and Mayor David Raizk of the city of Wilmington, the projected economic impact of the job losses will exceed $400 million annually.” [8 CBS 2009]
7,500 residents of Wilmington – out of a 12,000 population – who have lost their jobs with DHL since cuts were announced late last year (9,000 were laid off nationwide). Employed as sorters, fork-lift drivers, mechanics and supervisors [1 Independent 2010]
Unemployment Rate [7 BLMI 2010]
Highest in March 2009 – 18.7%
Remains unchanged from September and October 2010 15.7% - Remains highest percent in state
Below is a chart showing the housing market suffering in the city of Wilmington.
Chart showing Decrease in Home Sales [2 city-data 2010]
Chart showing Single-family new house construction building permits [2 city-data 2010]
Stakeholders
Employees Laid off
Clinton County
Other businesses in community
Dhl
State of Ohio
Children
Airborne Express
Families of Laid off workers
Hospitals, Doctors
Shipping Industry
Schools
Germany
The above pictures depict the only a few of the stakeholders that have been affected. Job Fairs and new Food and Clothing Pantries are increasing in size to accommodate the need. [9 Sacramento Bee 2009] Employees Remarks (DHL only): [1 Casolari 2009]
- John Graber: President of ABX Air since 2006
"DHL told us that they don't need our service any more. We are eliminating thousands of people's jobs as a result of the domestic service going away, so our company is not anything close to what we were. We have thousands of employees who have been working and growing up with this company. I was reading in a school last week and a child asked me, 'Mr Graber, what do you do?' I said I worked for ABX and every kid raised their hand, saying, 'Do you know my brother?' 'You know my sister?' 'You know my uncle?' This company is so tight to this place." - ABX Fork-Lift Driver for 12 years
“I thought [the DHL deal] was a good change that I was going to have a job for ever and be a part of it. After 12 years my position was eliminated, so for me there's no possibility to work there anymore. I have a 13-year-old son, and I just bought a house thinking I had a good future. I still have health insurance but when my severance package is gone next month, I won't have”
- ABX Worker for 11 years
“I have never been unemployed till now. While I was working at the airport, I had a life outside home, with friends and colleagues. I had 15 people working for me and now we are all breaking up ? It’s sad. Things for the past couple of years were blooming. Everybody was happy with their job and house. It was difficult to get where we are now. We worked really hard and bought a house for our family. I earned good money. Now, I might have to work five to 10 years to get to that salary again. I'm scared."
How the problem could be fixed The city of Wilmington has received a lot of publicity since the departure of DHL. The city was profiled on CBS's '60 Minutes' titled "Economic Storm Battles Ohio Town". Afterwards, acts of kindness began coming in from all over to help. Rachael Ray came to toand did a special called "Thanksgiving on Main Street". Thanksgiving dinner was provided to many from Ray and Sarah Lee. With the help of Nick Lachey, both celebrities were able to help pay for the renovation of the town food pantry and provide enough food for a whole year. Jay Leno made the city a visit on his "Comedy Stimulus Tour" providing a free comedy show to the community.
The help and support being provided to affected communities through national media not only help the communities, but also draws attention to the sustainability issue. The more the country can see and realize what can happen when a community becomes dependent on a company, the more awareness there is to try and stop it in the future.
The city of Wilmington was also visited in 2008 by both presidential candidates who were rallying for voters in the swing state. At the time, DHL had proposed to leave, but had not made the decision official yet. Both came pledging to help the city the best they could. Currently the mayor and local government have hired an agency to plan new for the redevelopment of the Air Park. According to an article about 'The Disposable America', "our acquiescence encourages wasteful mergers, outsourcing, the shifting of production abroad, the loss of union protection, and wage stagnation. He argues that government must step in with policies that encourage companies to restrict layoffs and must generate jobs to supplement the present shortfall." [11 Utchitelle 2006]
This type is government awareness is definitely needed to from the highest up level possible. President Obama's American Recovery and Reinvestment Act is a great assistance. However, government officials at all levels including state level need to step in and work to keep and make negotiations with these large companies that a small city can not take on by themselves.
Lastly this type of devastation can help contribute to the redevelopment of cities and make them more sustainable for the future. However this will be an on going process that could take years to turn these communities around. But, it is a way to start fresh and become a model community that has faced an adversity and has become more sustainable because of it. It is easier to start out in smaller communities and see what works and then try to implement in larger areas to help prevent such devastation from happening their as well.
Employees laid off are now having to go back to school to get new skills or a degree they never had.
It's Not Until Companies Leave... That We Realize Their True Power The above collage depicts the devastation the community of Wilmington, Ohio faced when their largest employer, DHL, left the city after 5 years. The city has been visited by President Obama, President Bush, Presidential Candidate John McCain, seen on CBS's 60 Minutes television show, and helped by celebrities Nick Lachey, Rachael Ray, and Jay Leno. The focus of this sustainability problem deals with companies and businesses leaving cities with no options or help because of the communities' extreme dependance on that one large employer.
Introduction to Problem
Every city, no matter what size, has businesses and companies that are located within it. Many large businesses have locations all across the country. In today’s difficult economy, people and companies are facing financial issues, cutting costs, and having to make difficult decisions on priorities to stay stable. When we talk about the economy, often times people and businesses are spoke of as separate entities, however this is not the case. If companies are having trouble, so are the people who work there, families of workers, the communities that the companies are located in, and other companies, schools, and services located within these cities.
Reasons for Companies' Sustainability Issues
- Filed for bankruptcy and couldn’t find a buyer
- Decline in sales
- Leaving and entering a new market
- Moving manufacturing or part of company’s work overseas- Industrial Ineffienciency and Downsizing
We watched film on how companies wanted to be considered as a “person”, however, they are so much larger and powerful than a person. Many times the power of a company is not realized until they actually leave the city and only then their effect on the community can be witnessed.
Issues within this Problem
Every year companies and brands go out of business. Recently with the economic depression, many of those that have been long standing are disappearing. Do we ever stop to think, what has happened to towns where these businesses existed? Are the employees able to find new jobs?
Below are a wide range of examples within the last 2 years: [3 AOL 2009]
- Abercrombie and Fitch’s Ruehl brand will close by end of the year
- 60 Banks failed in 2009 – Washington Mutual Bank (WaMu) located in the hear of Seattle, Washington
- Circuit City closing and 30 thousand employees will be out of work
- Car Brands Disappearing
- Saturn and Hummer gone
- GM had 21k job cuts, closing 14 plants in 8 states, and ended franchise agreements with 2300 dealerships
- Pontiac just announced the discontinuation of the brand
- Linens ‘N Things exists only as an online-business nowHarder Hit Areas with More Focused Employee Base
- Kennedy Space Center Shuttle Program Ending
- More than 1,200 NASA workers were laid off
- ArcelorMittal the world’s largest steel producer closing part of business reducing number of employees from seven thousand to a few dozen- Sysco located in Norton, Mass is proposing to leave and move to a new city.
- Callaway Golf has began a phased layoff of 1,200 employees moving manufacturing to Mexico
- Electrolux closed 2 Iowa plants and sending work to Mexico leaving 850 thousand out of work
Consequences of This problem
Many of the NASA workers have been working there for many years
DHL Acquiring Airborne Express
Chart showing Single-family new house construction building permits [2 city-data 2010]
Stakeholders
Employees Remarks (DHL only): [1 Casolari 2009]
- John Graber: President of ABX Air since 2006
"DHL told us that they don't need our service any more. We are eliminating thousands of people's jobs as a result of the domestic service going away, so our company is not anything close to what we were. We have thousands of employees who have been working and growing up with this company. I was reading in a school last week and a child asked me, 'Mr Graber, what do you do?' I said I worked for ABX and every kid raised their hand, saying, 'Do you know my brother?' 'You know my sister?' 'You know my uncle?' This company is so tight to this place."
- ABX Fork-Lift Driver for 12 years
“I thought [the DHL deal] was a good change that I was going to have a job for ever and be a part of it. After 12 years my position was eliminated, so for me there's no possibility to work there anymore. I have a 13-year-old son, and I just bought a house thinking I had a good future. I still have health insurance but when my severance package is gone next month, I won't have”
- ABX Worker for 11 years
“I have never been unemployed till now. While I was working at the airport, I had a life outside home, with friends and colleagues. I had 15 people working for me and now we are all breaking up ? It’s sad. Things for the past couple of years were blooming. Everybody was happy with their job and house. It was difficult to get where we are now. We worked really hard and bought a house for our family. I earned good money. Now, I might have to work five to 10 years to get to that salary again. I'm scared."
How the problem could be fixed
The city of Wilmington has received a lot of publicity since the departure of DHL. The city was profiled on CBS's '60 Minutes' titled "Economic Storm Battles Ohio Town". Afterwards, acts of kindness began coming in from all over to help. Rachael Ray came to toand did a special called "Thanksgiving on Main Street". Thanksgiving dinner was provided to many from Ray and Sarah Lee. With the help of Nick Lachey, both celebrities were able to help pay for the renovation of the town food pantry and provide enough food for a whole year. Jay Leno made the city a visit on his "Comedy Stimulus Tour" providing a free comedy show to the community.
The city of Wilmington was also visited in 2008 by both presidential candidates who were rallying for voters in the swing state. At the time, DHL had proposed to leave, but had not made the decision official yet. Both came pledging to help the city the best they could. Currently the mayor and local government have hired an agency to plan new for the redevelopment of the Air Park.
According to an article about 'The Disposable America', "our acquiescence encourages wasteful mergers, outsourcing, the shifting of production abroad, the loss of union protection, and wage stagnation. He argues that government must step in with policies that encourage companies to restrict layoffs and must generate jobs to supplement the present shortfall." [11 Utchitelle 2006]
Lastly this type of devastation can help contribute to the redevelopment of cities and make them more sustainable for the future. However this will be an on going process that could take years to turn these communities around. But, it is a way to start fresh and become a model community that has faced an adversity and has become more sustainable because of it. It is easier to start out in smaller communities and see what works and then try to implement in larger areas to help prevent such devastation from happening their as well.
- Employees laid off are now having to go back to school to get new skills or a degree they never had.
- Job Fairs are traveling all over
With the state of our current economy, we can no longer approach development in the same manner. Leveraging assets will work to draw people to cities. Below is a comparison made by researcher at Michigan University [10 Michigan U 2009]Supporting Links:DHL Donating Airparkhttp://www.daytondailynews.com/news/dhl-donates-wilmington-air-park-741941.html? Jay Leno - Comedy Stimulus Tourhttp://www.huffingtonpost.com/2009/05/10/jay-leno-takes-show-to-jo_n_201337.html Rachael Ray - Thanksgiving on Main Streethttp://www.rachaelrayshow.com/show/view/882/ John McCain visits Wilmingtonhttp://blog.cleveland.com/openers/2008/08/_mary_altaffer_associated_pres.html American Recovery and Reinvestment Achttp://www.recovery.gov/pages/default.aspx Wilmington New Journalwww.wnewsj.com Goodbye Pontiachttp://news.yahoo.com/s/ap/us_goodbye_pontiacYou Won't See These In 2010http://www.walletpop.com/specials/departures-2009/ Syscohttp://www.thesunchronicle.com/articles/2010/10/26/news/8135682.txtElectroluxhttp://wcfcourier.com/business/local/article_8782edaa-c021-11de-a016-001cc4c002e0.htmlArcelorMittalhttp://www.wsws.org/articles/2009/jul2009/mone-j14.shtmlAstraZenechttp://www.loughboroughecho.net/news/loughborough-news/2010/03/04/astrazeneca-closure-plan-leaves-town-reeling-73871-2596231
Sources:
[1] Casolari, Samantha “Ghost Town: An American Nightmare” The Independent. 17 March 2009. http://www.independent.co.uk/news/world/americas/ghost-town-an-american-nightmare-1646434.html* [2] Onboard Informatics “Wilmington, Ohio” City-Data. 2010. http://www.city-data.com/city/Wilmington-Ohio.html
[3] “Big Brands That Have Taken Their Last Bow in America” Daily Finance AOL Money. 2009. http://www.dailyfinance.com/investing/disappearing-brands-from-america/#
[4] Couwels, John “Shuttle layoffs leave some workers adrift
” CNN USA. 1 October 2010. http://www.cnn.com/2010/US/10/01/nasa.worker.layoffs/index.html
[5] Dobbs, G Michael “Layoffs at Callaway: a devastating blow” Chicopee News. 18 Aug 2010. http://www.thereminder.com/localnews/chicopee/layoffsatcallawaya/
[6] Eley, Tom “Obama offs nothing to states, cities devastated by GM plant closures” ICFI. 3 Jun 2009. http://www.wsws.org/articles/2009/jun2009/gmpc-j03.shtml
[7] “Ranking of Ohio County Unemployment Rates” Bureau of Labor Market Information. Sept 2010. http://lmi.state.oh.us/laus/Ranking.pd [8] Pelley, Scott “Economic Storm Batters Ohio Town” CBS ’60 Minutes’. 25 Jan 2009. http://www.cbsnews.com/stories/2009/01/22/60minutes/main4747832.shtml[9] Moore, John “Chronicling the economic downturn” The Sacramento Bee. 2 Feb 2009. http://www.sacbee.com/static/weblogs/photos/2009/02/019188.html[10] Lansing, E “Creating a local strategic growth plan for the new economy” Citizen Planner Advanced Academy. Michigan University Extension. 25 June 2009. www.landpolicy.msu.edu/modules.php?name=Documents
[11] Uchitelle, Louis. “The disposable American : layoffs and their consequences” New York 25 June 2006. http://poetry.lib.calpoly.edu/search~S0?/Xlayoffs&SORT=D/Xlayoffs&SORT=D&SUBKEY=layoffs/1%2C23%2C23%2CB/frameset&FF=Xlayoffs&SORT=D&4%2C4%2C
[12] Krepps, Matthew “Industrial inefficiency and downsizing : a study of layoffs and plant closures” New York Garland Publishing. 1997. http://poetry.lib.calpoly.edu/search~S0?/Xlayoffs&SORT=D/Xlayoffs&SORT=D&SUBKEY=layoffs/1%2C23%2C23%2CB/frameset&FF=Xlayoffs&SORT=D&5%2C5%2C
Image Sources:
http://articles.cnn.com/2008-11-10/us/dhl.closing.wilmington_1_ground-hubs-dhl-hub-job-cuts?_s=PM:US
http://www.123people.com/s/david+raizk
http://thebosh.com/archives/gossip/nick_lachey/
http://www.themugshow.com/2009/07/rachael-ray-gets-vocal-cord-surgery/
http://www.cleveland.com/news/index.ssf/2009/04/12-weekhttp://www.sacbee.com/static/weblogs/photos/2009/02/019188.htmlhttp://www.cbsnews.com/stories/2009/01/22/60minutes/main4747832.shtml